Pakistan’s central bank bans cash foreign exchange sales

New Delhi : Pakistan’s central bank, State Bank of Pakistan (SBP) ordered the execution of all foreign currency sales to resident citizens specifically for deposits into foreign currency (FCY) accounts, via account‑to‑account transfers, which could cause delays in accessing funds, a report has said.

While the move is framed as a step to control the outflow of dollar and prevent money changers from hoarding large sums of foreign currency in bank accounts, independent exchange companies argue that the circular disproportionately benefits bank‑owned exchange outlets, the report from Ceylon wire news said.

Since SBP has been encouraging banks to open their own exchange branches, the new rules will likely divert customers toward these institutions.

Restrictions on holding cash dollars in bank accounts further weaken independent money changers, limiting their ability to compete with bank‑affiliated companies, the report said.

The move effectively means individuals purchasing dollars for deposit will no longer receive cash but the amount will be transferred directly into their FCY accounts. For those without such accounts, the option to buy cash dollars has effectively been eliminated.

Exchange companies must issue cheques that customers deposit into their FCY accounts. Operationally, exchange companies must now update systems, verify customer accounts, for cheque transfers, adding administrative burdens.

This heightened documentation requirement is intended to curb misuse and ensure transparency. Yet for ordinary citizens, especially those unfamiliar with banking procedures or lacking access to formal accounts, the process may prove cumbersome.

Transfers within the same bank will be immediate, but interbank transfer could take at least five days and as long as 20–25 days for euros and pounds, they said.

Critics fear that these adjustments will slow down transactions and frustrate customers, eroding trust in the sect